Integrate d Model of Export Activity

Journal of Marketing Theory and Practice, vol. 19, no. 2 (spring 2011), pp. 187–204.© 2011 M.E. Sharpe, Inc. All rights reserved.

ISSN 1069-6679/2011 $9.50 + 0.00. DOI 10.2753/MTP1069-6679190205

Export performance has traditionally been considered the final effect of the different variables affecting export activ-ity. But the variable can also be seen as a resource associated with organizational learning (Lages, Jap, and Griffith 2008), although this line of research is relatively undeveloped. Thus, the first main objective of the current work is to ad-dress this gap in the literature and analyze whether organi-zational learning (evaluated using the relation past export performance–export proactivity–export market orientation) influences the firm’s export commitment and its strategic decisions concerning the adaptation of the marketing-mix elements to the requirements of the foreign markets. In turn, these two factors—export commitment and adaptation of marketing mix—are considered antecedents of managers’ perceptions about their firm’s competitive advantages in the foreign markets. Finally, the research examines whether these perceived competitive advantages condition managers’ attitudes toward export activity in the immediate future.

Even if export firms possess similar resources and capa-bilities, they can exhibit different types of behaviors and attitudes in relation to export activity as a consequence of managers’ different orientations and perceptions (Navarro et al. 2010b). This potential heterogeneity is not well under-stood, and improving our knowledge about it is essential to further strategic knowledge about export marketing. Thus, the second main objective of the current research is to help fill that research gap. Segmentation techniques are used to identify subgroups (Sarstedt and Ringle 2010).

First, we present a literature review, define the variables to be analyzed, delimit the theoretical framework of the research, and list the hypotheses to be tested. Second, we describe the research methodology, sample, information obtained, and the data analysis tools used to test the hy-potheses and to segment the sample. Third, the results are reported and the main conclusions and managerial implica-tions offered. The main limitations of the study and future research directions conclude the paper.

LITERATURE REVIEW

Managers’ Attitudes Toward Future Exporting

In the current work, managers’ attitudes toward exporting—evaluated from the perspective of the future—is the ulti-mate dependent variable. These attitudes are defined as the firm’s willingness or predisposition to continue to commit financial, human, and managerial resources to its export activity (Lages and Montgomery 2004).

InTEgRATEd ModEL oF ExpoRT AcTIVITy: AnALysIs oF HETERogEnEITy In MAnAgERs’ oRIEnTATIons And pERcEpTIons on

sTRATEgIc MARkETIng MAnAgEMEnT In FoREIgn MARkETs

Antonio navarro, Francisco J. Acedo, Fernando Losada, and Emilio Ruzo

The current work has two main objectives. First, after building an integrated model, we analyze relations between managers’ perceptions, orientations, behaviors, and attitudes toward exporting. Second, we examine whether these relations differ between groups of firms. The results confirm that organizational learning (evaluated using the relation past export performance–export proactivity–export market orien-tation) acts as an antecedent of both export commitment and adaptation of the marketing mix to the foreign markets. The findings indicate that the variables export commitment and marketing-mix adapta-tion determine perceived competitive advantages in the foreign markets, and these perceived competitive advantages condition managers’ attitudes toward future exporting. The results also suggest the existence of two latent classes—proactive and conservative exporters—and the characteristics of these two distinct types of exporters are described.

Antonio navarro (Ph.D., University of Seville), Associate Professor of Marketing and Market Research, University of Seville, Seville, Spain, [email protected].

Francisco J. Acedo (Ph.D., University of Seville), Associate Profes-sor of Strategic Management, University of Seville, Seville, Spain, [email protected].

Fernando Losada (Ph.D., University of Santiago), Associate Pro-fessor of Marketing and Market Research, University of Santiago, Lugo, Spain, [email protected].

Emilio Ruzo (Ph.D., University of Santiago), Associate Professor of Marketing and Market Research, University of Santiago, Santiago, Spain, [email protected].

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past Export performance

Traditionally in studies of export activity, researchers have considered export performance the final dependent vari-able (e.g., Cavusgil and Zou 1994; Rose and Shoham 2002; Zou, Taylor, and Osland 1998). But recently a new line of research has developed in the literature (Lages and Mont-gomery 2004; Lages, Jap, and Griffith 2008; Morgan, Kaleka, and Katsikeas 2004) that considers export performance as an antecedent of managers’ orientations and perceptions and of the firm’s commitment to export activity. This is the perspective adopted in the current study, where past export performance is defined as a resource associated with organizational learning. We consider two dimensions of past export performance: one quantitative, defined by the growth in export sales in the past three years, and the other qualitative, defined by managers’ satisfaction with the results of the firm’s export activity in recent years.

Export proactivity

Filatotchev et al. (2009) show that a firm’s progress through its internationalization process is strongly associated with managers’ perceptions, attitudes, and orientations. In this context, export proactivity can be defined as the degree to which the firm sees exports as a logical source of expansion for its business. Export proactivity affects the resources dedicated to investigating the needs of the foreign markets with the aim of identifying commercial opportunities and facilitating the firm’s international positioning (Francis and Collins-Dodd 2000).

Export Market orientation

In line with Cadogan, Diamantopoulos, and de Mortanges (1999), we define export market orientation (EMO) activities as (1) the generation of market intelligence pertinent to the firm’s exporting operations, (2) the dissemination of this information to the appropriate decision makers, and (3) the design and implementation of responses directed toward export customers, export competitors, and other extraneous export market factors that affect the firm and its ability to provide superior value to export customers.

Export commitment

In line with the influential structure–conduct–performance framework, several studies (e.g., Lages and Montgomery 2004; Lages, Jap, and Griffith 2008; O’Cass and Julian 2003) treat export commitment as an antecedent or contingency

factor that affects the international marketing strategy, which in turn determines performance. In this context, export commitment is defined as a strategic factor that de-termines the resources allocated to the firm’s foreign trade operations and is fundamental for progress and continuous improvement in foreign markets (Lages, Jap, and Griffith 2008). The factor can condition the managers’ willingness to increase the firm’s marketing efforts to achieve its inter-national objectives (O’Cass and Julian 2003).

strategic Marketing decisions: Adaptation Versus standardization

Various authors recommend using standardized market-ing strategies when the target customers in the different country-markets show similar behaviors or profiles (Kustin 2004; Özsomer and Simonin 2004). Nevertheless, and ac-cepting that socioeconomic trends may be showing con-vergences in the behavior of different country-markets, cultural differences and the distinct idiosyncrasies of the environment of each foreign market may cause customers to diverge in their response to the firm’s marketing stimuli (Navarro et al. 2010a). Albaum and Tse (2001) point out that adaptation is essential to achieve success in foreign markets. In any case, it is impossible to implement these two extreme positions—standardization or adaptation—strictly because as the contingency approach indicates, their application depends on the characteristics of the product, sector, or environment (Calantone et al. 2006). Thus, we measure adaptation of the marketing mix using the degree of adaptation (versus standardization) applied in the export marketing strategy (Lages and Montgomery 2004; Theodosiou and Leonidou 2003).

perceived competitive Advantages in Foreign Markets

The current state of knowledge about the achievement of competitive advantages in export markets is limited and incomplete (Li and Ogunmokun 2001; Navarro et al. 2010b), perhaps because of the considerable difficulties in evaluating the construct adequately (Morgan, Kaleka, and Katsikeas 2004). Kaleka (2002) points out that the competi-tive advantages associated with export activity derive from the combination of cost, product, price, and service used in the different country-markets where the firm operates. Moreover, evaluating a firm’s competitive advantage implies collecting information about customers’ perceptions of the firm’s products and services, or investigating the explana-tory factors (resources and capabilities) of each firm’s posi-

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tion in the market compared to its competitors. For that reason, we define perceived competitive advantages as the managers’ perception of their firm’s competitive strength relative to its competitors in its export markets (Albaum et al. 2003; Katsikeas, Piercy, and Ioannidis 1996).

HypoTHEsEs

past Export performance

According to Lant and Hurley (1999), the results achieved in the past will influence the current strategic decisions, affecting the organization’s structure and behaviors. Moreover, past export performance can be conceived as a resource associated with organizational learning (Morgan, Kaleka, and Katsikeas 2004), which reinforces the firm’s export proactivity when the results are positive but has the opposite effect when they are negative (Lages, Jap, and Griffith 2008). The first research hypothesis of this work is as follows:

Hypothesis 1: Past export performance has a positive effect on export proactivity.

This general hypothesis subdivides into two subhypotheses depending on the measure of past export performance considered:

Hypothesis 1a: Quantitative past export performance has a positive effect on export proactivity.

Hypothesis 1b: Qualitative past export performance has a positive effect on export proactivity.

At the same time, results are one of the fundamental engines of organizational learning. When they are positive, they reinforce the mechanisms for generating knowledge about the foreign markets, encourage the distribution of market intelligence to where it is needed in decision mak-ing, and boost the development of rapid responses to the needs and expectations of the foreign consumers (Diaman-topoulos and Cadogan 1996). For this reason, EMO activities within the organization are a dynamic rather than static process (Kirca, Jayachandran, and Bearden 2005), which will gradually adapt as the firm learns more while engaged in its activities (Day 1994). The second hypothesis is as follows:

Hypothesis 2: Past export performance has a positive effect on export market orientation.

This general hypothesis subdivides into two subhypotheses depending on the measure of past export performance considered:

Hypothesis 2a: Quantitative past export performance has a positive effect on export market orientation.

Hypothesis 2b: Qualitative past export performance has a positive effect on export market orientation.

Export proactivity

The firm’s export proactivity reduces the psychological barriers in the decision making associated with the inter-nationalization process, making the management show a more active, dynamic behavior in the search for business opportunities in the foreign markets. Managers conse-quently develop more effective practices for capturing and processing information about the needs and preferences of the foreign consumers (Zou and Cavusgil 2002). This allows the organization to design better, faster responses to customers, competitors, and other external factors of the foreign markets (Cadogan and Cui 2004). This leads to our third hypothesis:

Hypothesis 3: Export proactivity has a positive effect on export market orientation.


Carrying out EMO activities in the organization reduces the psychological barriers associated with internationaliza-tion processes and increases confidence in decision making (Cadogan, Diamantopoulos, and Siguaw 2002). One of the main consequences is its reinforcement of managers’ com-mitment to seek and exploit commercial opportunities in the foreign markets (Armario, Ruiz, and Armario 2008).

In that sense, EMO can be conceived as a dynamic capability that, associated with organizational learning, reinforces the managers’ commitment to the internation-alization process and so increases the level of financial, human, and managerial resources the managers dedicate to exporting (Navarro et al. 2010b). These ideas are reflected in the following hypothesis:

Hypothesis 4: Export market orientation has a positive effect on export commitment.

However, the acquisition of information about the firm’s target markets has always been considered fundamental for taking effective and efficient marketing decisions because it directly influences the design of the commercial strate-gies in the firm (Leonidou and Theodosiou 2004). The generation of this knowledge about the foreign markets will reduce the uncertainty and risks associated with the export


activity (Racela, Chaikittisilpa, and Thoumrungroje 2007), which will make the firm show a more proactive behavior in adapting to the needs and desires of each country-market (Armario, Ruiz, and Armario 2008). Our next hypothesis reflects this idea:

Hypothesis 5: Export market orientation has a positive effect on adaptation of the marketing-mix elements to the needs of the foreign markets.

Export commitment

Inspection of the exporting literature reveals studies (e.g., Beamish et al. 1999; Styles and Ambler 2000) that theorize that export commitment is a direct antecedent of perfor-mance. However, previous research has concentrated on the effect of strategy in general, and marketing program adapta-tion/standardization in particular, on export performance outcomes (Hultman, Robson, and Katsikeas 2009; Sousa, Martinez-López, and Coelho 2008).

One of the main consequences of export commitment is an increase in the managers’ predisposition to make the necessary adaptations in the supply of products and services commercialized in the foreign markets with the aim of achieving sustainable competitive advantages (Styles and Ambler 2000). Our next hypothesis is as follows:

Hypothesis 6: Export commitment has a positive effect on adaptation of the marketing-mix elements to the needs of the foreign markets.

The firms most committed to the foreign markets tend to provide better support to their foreign distributors, and exchange information that is critical for the success of their operations in the foreign markets (Cavusgil and Zou 1994). These firms also provide additional services, particularly postsales services. All this may translate into higher levels of loyalty in the target markets and have a positive effect on the achievement of competitive advantages in the differ-ent country markets where the firm operates (Navarro et al. 2010b). The following hypothesis reflects this argument:

Hypothesis 7: Export commitment has a positive effect on the managers’ perceptions about the achievement of competitive advantages in the foreign markets.

strategic Marketing decisions: Adaptation Versus standardization

Some authors (e.g., Morgan, Kaleka, and Katsikeas 2004; O’Cass and Julian 2003) argue that developing a differen-tiated marketing strategy in foreign markets requires the

firm to adapt to the needs and desires of the target markets. Only then will the firm achieve sustainable competitive advantages that are defendable in the medium and long term. Thus, the strategic marketing decisions condition the achievement of competitive advantages in the for-eign markets. More specifically, when the firm adapts its marketing-mix elements to the idiosyncrasies of the dif-ferent country-markets, its products are more likely to be perceived as offering superior value compared to those of its rivals (Theodosiou and Leonidou 2003). The penultimate hypothesis in this work is as follows:

Hypothesis 8: Adaptation of the marketing-mix elements has a positive effect on the managers’ perceptions about the achievement of competitive advantages in the foreign markets.

perceived competitive Advantages in Foreign Markets

According to Cavusgil and Nevin (1981), the perceived competitive advantages of exports constitute one of the motives encouraging firms to enter foreign markets and af-fect their progress through the internationalization process. Moreover, managers’ perceptions about the possession of competitive advantages in foreign markets increase their favorable attitudes toward the export activity and, conse-quently, the firm’s predisposition to continue committing financial, human, and managerial resources to its export operations in the future (Leonidou, Katsikeas, and Samiee 2002). This leads to the final research hypotheses of this work:

Hypothesis 9: Perceptions about the achievement of competitive advantages in the foreign markets have a positive effect on the managers’ attitudes toward export-ing in the future.

The final research hypotheses are summarized in Figure 1.

HETERogEnEITy oF ExpoRT FIRMs AccoRdIng To THE ModEL

The extant literature on the existence of different types of export firms depending on a series of variables is both scarce and highly fragmented. McGuinness and Little (1981) observe the existence of different levels of international commitment depending on firm characteristics and managers’ perceptions of the export activity. Cooper and Kleinschmidt (1985) apply segmentation techniques and identify eight types of market-

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ing strategy potentially applicable in the foreign markets. The differences concern the adaptations needed in the export products and the decisions regarding the choice of markets. More recently, Morgan, Kaleka, and Katsikeas (2004), using a model of antecedents of export venture performance, argue for the possible existence of different archetypes of exporters depending on the resources and capabilities available and managers’ orientations and perceptions about the export activity. In a similar line, Filatotchev et al. (2009) examine the relations between the firm’s export orientation and its research and development intensity, international experience and presence, and knowledge transfer.

Nevertheless, none of the previous works studies the heterogeneity of the export firms analyzed on the basis of the relations between the different variables studied. With the aim of helping to fill this gap in the literature, the cur-rent study uses segmentation techniques on the basis of the model of relations between the variables proposed here.

METHodoLogy

Measurement scales

The use of latent variables evaluated using different indica-tors requires the definition of the type of relation between the construct and the observed variables that define it. Two

perspectives are possible—reflective and formative scales. In marketing, the most traditional perspective has been to use reflective measurement scales (Diamantopoulos 2008), as-suming that the indicators vary depending on the variations in the latent variable (Edwards and Bagozzi 2000). But the latent construct is often formed by indicators that, although they measure the same concept, have a different nature. Researchers increasingly argue for the use of formative scales (Diamantopoulos and Siguaw 2006; Diamantopoulos and Winklhofer 2001; Jarvis, MacKenzie, and Podsakoff 2003) for which changes in the indicators generate variations in the latent concept. In this case, the construct is formed from a (normally linear) combination of its indicators plus an error term (Bollen 1989; Bollen and Lennox 1991). In this line, Diamantopoulos (1999) points out that the use of a for-mative approach in configuring measurement instruments can be very useful when the constructs are highly complex in nature. This is the case of the current research for the variables past export performance, export proactivity, EMO, adaptation of marketing-mix elements to the requirements of the foreign markets, and managers’ perceived competi-tive advantages in the foreign markets. The remaining two scales—export commitment and attitudes toward future exporting—are treated as reflective.

Following the recommendations of Rose and Shoham (2002) and Zou, Taylor, and Osland (1998), we measured

Figure 1 conceptual Model and Hypotheses


quantitative past export performance using the growth in export sales in the past three years, and qualitative past export performance through managers’ satisfaction with the following results in the past three years: export sales growth, firm’s image in the foreign markets, profitability of overseas business, market share, and international expansion.

The firm’s level of export proactivity was measured us-ing four indicators (Francis and Collins-Dodd 2000): export propensity (export sales/total sales), importance attributed to foreign markets compared to the home market, efforts dedicated to the systematic investigation of foreign mar-kets, and frequency of contacts with/visits to international distributors.

Cadogan, Diamantopoulos, and Siguaw (2002) point out that EMO should consist of three dimensions: the generation of information about the foreign markets, the dissemination of the information between the departments of the firm for effective decision making, and the design of responses to the information that has been generated and disseminated. These were the three dimensions of EMO considered in this work, and each was measured using three indicators.

We measured export commitment from the behavioral perspective, defining the variable on the basis of the level of financial, human, and managerial resources that the firm currently allocates to its export activity (Stump, Athaide, and Axinn 1999).

Following the recommendations of Lages and Montgom-ery (2004), Leonidou, Katsikeas, and Samiee (2002), and Theodosiou and Leonidou (2003), adaptation of marketing strategy to the foreign markets was measured by the degree to which the firm adapts its marketing-mix elements (prod-uct, price, distribution, and promotion) to the requirements of the foreign markets.

According to Li and Ogunmokun (2001), subjective measures of the competitive advantages of exports are valid, reliable, and defined in relation to competitors. In this work, following Navarro et al. (2010b), we measured perceived competitive advantages using the export manag-ers’ perception about their firm’s position in its foreign markets compared to its main competitors in six areas: product differentiation, price, distribution, promotion, human resources, and costs.

Finally, and following the recommendations of Lages and Montgomery (2004) and Navarro et al. (2010b), man-agers’ attitudes toward future exporting were measured using the financial, human, and managerial resources that the firm is willing to commit in the next period with the aim of improving its position and its performance in the

foreign markets. For more details, see the questionnaire in the Appendix.

data collection

To test the proposed hypotheses, we carried out an empirical study using data from a representative sample of Spanish export firms. After refining the information, we defined a population object of study of 1,734 exporters belonging to various sectors of activity. We used the single-informant method (export manager) and personal interviews to collect the information. In this way, we ensured that only people with the right knowledge and vision to be able to respond to the questions adequately did so (Huber and Power 1985). The final sample consisted of 150 export firms selected at random, for a sample error of ±7.65 percent (confidence level = 95 percent; p = q = 0.5).

data Analysis Techniques

To analyze the data and evaluate the relations between the different constructs, we chose structural equation modeling via PLS (partial least squares), in view of the characteristics of the model and sample. As Reinartz, Haenlein, and Henseler (2009) show, variance-based techniques (such as PLS) offer better estimation than other techniques in samples under 250. In addition, the use of PLS rather than other types of structural equation modeling tools is also appropriate here because (Diamantopoulos 1999; Diamantopoulos and Win-klhofer 2001): (1) this work is exploratory; (2) compared to other tools (Amos, EQS, etc.), PLS does not require large samples (the current work has 150 cases); (3) the proposed model considers formative and reflective scales together, and using PLS avoids the indeterminacy problems of other techniques such as EQS or LISREL (Jarvis, MacKenzie, and Podsakoff 2003); and (4) PLS is a nonparametric technique, so researchers do not need to guarantee the normality of the data. Besides, this technique is becoming more important, as can be seen from the number of publications using it in the main journals (Henseler, Ringle, and Sinkovics 2009). We used the statistics package SmartPLS 2.0 M3 (Ringle, Wende, and Will 2005) to carry out the empirical analysis.

To achieve the second proposed research objective of this work—the identification of different patterns or latent classes within the general model—and given the choice between a large number of possible techniques (Sarstedt 2008), we decided to use finite mixture PLS (FIMIX-PLS), which is considered the most appropriate technique to capture the heterogeneity in structural equation models based on PLS

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(Sarstedt and Ringle 2010). This technique starts from the idea that the total population consists of different subpopu-lations, with the whole being a mix of these groups.

Evaluation of the Measurement Model

To interpret and analyze the proposed model using PLS, the analysis went through two distinct stages (Barclay, Higgins, and Thompson 1995): (1) evaluation of the measurement model, and (2) analysis of the structural model. This sequence ensures that the proposed measurement scales are valid and reliable before testing the hypotheses. The results are presented in Table 1. For the reflective scales, the factor loadings were all above the recommended 0.7 (Carmines and Zeller 1979). The composite reliability and average variance extracted (AVE) values also exceeded the recommended values of 0.7 and 0.5, respectively (Fornell and Larcker 1981; Nunnally 1978).

Thus, the results support the convergent validity of the reflective scales considered in this study (the three dimen-sions of EMO, export commitment, and attitudes toward future exporting). Finally, to ensure the discriminant va-lidity, we confirmed that the squared correlations between each pair of constructs did not exceed the AVE (Barclay, Higgins, and Thompson 1995). We also checked that the intercorrelations between the constructs were significantly different from 1, which provided additional evidence of the discriminant validity.

To validate the formative scales, we followed Diamanto-poulos, Riefler, and Roth’s (2008) recommendations. We could not omit or eliminate any of the indicators of the scales because the information was important, so we en-sured the absence of multicollinearity using the variance inflation factor (VIF). In all the cases (first- and second-order formative), the VIF was less than the recommended value of 10 (Kleinbaum, Kupper, and Muller 1988).

REsULTs

Hypothesis Tests: parameters of the structural Model

Having ensured the convergent and discriminant validity of the measurement model, we then tested the relations between the different variables. We started by calculat-ing, using the bootstrap method (1,000 subsamples), the different statistical parameters (Table 2). Although many researchers opt for 500 subsamples in their studies, and this is sufficient, in the current work, we decided to use 1,000 to

reduce the randomness (Davidson and MacKinnon 2000). Other authors (Henseler, Ringle, and Sinkovics 2009) have used even more (5,000 subsamples).

The hypothesis tests considered the sign and significance of the t-values in each relation (β coefficient). Of the nine proposed hypotheses, six were verified totally and two par-tially (the hypotheses involving past export performance) with the postulated sign. Hypothesis 6, which postulates that export commitment has a positive effect on adaptation of the marketing-mix elements, was rejected. The variance explained values of the different endogenous constructs are given in the Discussion and Contributions section.

Analysis of Heterogeneity in the sample

The global model proposed, which has largely been sup-ported by the results of the analysis, assumes that the managers’ perceptions and orientations are similar in all the export firms and consequently that the managers show similar behaviors and attitudes toward export activity. But in practice, this may not be the case. Thus, considering the second main objective of the current work, we proceeded to investigate the possible existence of different latent classes within the sample being analyzed. For this purpose, we used a new technique that is being used by a small number of researchers but has yet to be seen in a large number of studies in the literature—FIMIX-PLS. This technique allows the researcher to identify latent classes in the model without establishing a priori classifications. We used the FIMIX-PLS module in the SmartPLS 2.0 M3 software (Ringle, Wende, and Will 2005).

Using this methodology requires that the researcher fol-lows an iterative process. Thus, we first calculated the solu-tions for numbers of segments (K). We ran the procedure for the solutions from K = 2 to K = 6. Table 3 shows the goodness of fit for each of the proposed solutions. A comparison of the different information obtained for each segment clas-sification suggests that the most appropriate choice is the creation of two groups (Hahn et al. 2002; Ringle, Sarstedt, and Mooi 2010). Sarstedt, Becker, and Ringle (2011) evalu-ated the performance of several model selection criteria, observing the use of a combination of Akaike’s informa-tion criterion 3 (AIC3), consistent AIC (CAIC), and normed entropy (EN) as the most adequate (Rigdon, Ringle, and Sarstedt 2011; Sardsted, Becker, and Ringle 2011). As can be seen from Table 3, all the values point to the selection of only two segments. The final choice of segments has an EN above 0.5, which means the segments are well separated (Ringle, Wende, and Will 2010).


Table 1Evaluation of the Measurement Model

Construct/Dimension/Indicator

Variance Inflation Factor Weight

Factor Loading t

Composite Reliability

(ρc )

Average Variance Extracted

Quantitative Export Performance (formative construct)

1.001 n.a. n.a.

EG2000 2.756 0.399 2.157EG2001 2.756 –0.275 2.331EG2002 2.749 0.967 4.795

Qualitative Export Performance (formative construct) 1.001 n.a. n.a.EP1 1.551 –0.454 3.516EP2 1.720 0.149 1.014EP3 1.528 0.202 1.532EP4 2.229 0.398 2.697EP5 1.954 0.660 4.789

Export Proactivity (formative construct) n.a. n.a.PRO1 1.667 0.086 0.684PRO2 1.707 0.505 4.223PRO3 1.800 0.489 3.707PRO4 1.237 0.128 1.269

Export Market Orientation (second-order formative construct)

n.a. n.a.

Generation of market intelligence (first-order reflective construct)

2.036 0.594 3.878 0.922 0.799

GEN1 0.837 20.473GEN2 0.909 42.802GEN3 0.932 66.719

Dissemination of market intelligence (first-order reflective construct)

2.151 0.155 1.293 0.917 0.787

DIS1 0.888 32.754DIS2 0.900 65.980DIS3 0.873 29.125

Response to market (first-order reflective construct)

1.984 0.480 2.957 0.938 0.835

RESP1 0.899 36.183RESP2 0.901 34.433RESP3 0.939 74.376

Export Commitment (reflective construct) 0.847 0.583COMM1 0.758 7.199COMM2 0.700 18.425COMM3 0.841 13.793COMM4 0.747 5.418

Adaptation of Marketing Mix (formative construct) n.a. n.a.PROD 2.122 0.093 0.378PRIC 2.087 0.417 2.111DIST 2.081 0.003 0.015PROM 1.378 0.647 3.674

Perceived Competitive Advantages (formative construct)

n.a. n.a.

ADV1 1.125 0.073 0.592ADV2 1.567 0.172 1.138ADV3 1.877 –0.184 0.907ADV4 1.903 0.410 2.571ADV5 2.162 0.426 2.725ADV6 1.763 0.335 2.236

(continues)

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After determining the number of segments that best explains the heterogeneity, we proceeded to calculate the probability of belonging to these groups for each case and so place each sample firm in one of the two groups. The two groups had 80 and 70 cases, and no case showed an equal probability of belonging to the two groups. The next step was to evaluate the two models separately. Tables 4 and 5 show the results of the two groups.

The results showed that in Group 2 (n = 70), the construct attitudes toward future exporting needed to be refined to meet the criteria for convergent and discriminant validity. In addition, the other reflective variable—export commitment—also needed to drop one item to achieve acceptable AVE and composite reliability (CR) values. This was a problem as it provokes measurement invariance. In order to get around this problem, we observed the different situations for each construct (Vandenberg and Lance 2000; Williams, Vanden-berg, and Edwards 2009). Following the work of Williams, Vandenberg, and Edwards (2009), we opted not to compare the relations where the constructs were highly modified (H9 in the overall model), but no important invariance was ob-served for the commitment construct, so commitment was

considered for the comparison. Nevertheless, this construct and its relations clearly require further study.

It is also interesting to note the differences in the R2 values obtained in the models, as well as in the paths, CR, and significance (t) of the model. With regard to the vari-ance explained, firms from Group 2 show substantially lower values, although the paths do not lose significance in many cases. This suggests that firms from the two groups do behave differently but that the relations proposed in the hypotheses remain valid for the two models.

In view of these results, we proceeded to examine whether the differences in the results between the two models were significant. To carry out the calculations, we followed Chin’s (2000) indications for multigroup analysis. Chin suggests two different approaches depending mainly on the assumption of equal variances for the two populations. These approaches were also used in Eberl’s (2010) work on multigroup analysis. If both samples have the same variance, researchers should calculate a t-test with m + n – 2 degrees of freedom.

In contrast, if the variances differ, researchers should ap-ply the Smith-Satterthwaite test (Satterthwaite 1946):

Construct/Dimension/Indicator

Variance Inflation Factor Weight

Factor Loading t

Composite Reliability

(ρc )


Attitudes Toward Future Exporting (reflective construct)

0.945 0.852

ACTFUT1 0.906 41.583ACTFUT2 0.939 87.015ACTFUT3 0.923 59.110

Notes: n.a. = not applicable.

Table 2Parameters from Hypothesis Tests

Hypothesis β t-Value Supported

H1a: Quantitative past export performance–Export proactivity 0.105 1.613ns NoH1b: Qualitative past export performance–Export proactivity 0.552 9.526*** YesH2a: Quantitative past export performance–Export market orientation 0.042 0.621ns NoH2b: Qualitative past export performance–Export market orientation 0.292 3.274*** YesH3: Export proactivity–Export market orientation 0.498 6.405*** YesH4: Export market orientation–Export commitment 0.599 10.092*** YesH5: Export market orientation–Adaptation of marketing mix 0.380 4.132*** YesH6: Export commitment–Adaptation of marketing mix 0.065 0.706ns NoH7: Export commitment–Perceived competitive advantages 0.204 2.365*** YesH8: Adaptation of marketing mix–Perceived competitive advantages 0.477 6.635*** YesH9: Perceived competitive advantages–Attitudes toward exporting in the future 0.425 6.354*** Yes

Notes: ns = nonsignificant (one-tailed t(999) test). *** p < 0.001.


Tab

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Spring 2011 197

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Table 6 shows the results for the comparison of the differ-ent samples. Even though more differences would be expect-ed to appear, some interesting insights can be obtained from these results. As can be seen, significant differences exist in 5 of the 10 relations established in each group that could be compared, which confirms the existence of heterogeneity (two latent classes) within the global sample. Moreover, the absence of significance in the results of the complementary analyses conducted on the demographic variables (age, size, years of international experience, and number of countries to which the firm exports) and on the evolution in export sales in the past three years confirms that the heterogeneity

Table 4Average Variance Extracted, Composite Reliability, and Predictive Relevance


Composite Reliability R 2

Group 1 Group 2 Group 1 Group 2 Group 1 Group 2

Qualitative Past Export PerformanceQuantitative Past Export PerformanceExport Proactivity 0.583 0.232Export Market Orientation 0.893 0.206Export Commitment 0.672 0.597 0.890 0.815 0.767 0.038Adaptation of Marketing Mix 0.289 0.169Perceived Competitive Advantages 0.595 0.436Attitudes Toward Exporting in the Future 0.936 1.000 0.977 1.000 0.529 0.019

Table 5Structural Model Results

β t

Group 1 Group 2 Group 1 Group 2

H1a: Quantitative past export performance–Export proactivity 0.175 –0.167 3.767*** 1.025ns

H1b: Qualitative past export performance–Export proactivity 0.709 0.454 18.063*** 2.012*

H2a: Quantitative past export performance–Export market orientation 0.136 0.196 4.004*** 1.637ns

H2b: Qualitative past export performance–Export market orientation 0.275 0.382 5.635*** 2.535**

H3: Export proactivity–Export market orientation 0.672 0.056 14.675*** 0.267ns

H4: Export market orientation–Export commitment 0.875 0.180 46.426*** 1.816*

H5: Export market orientation–Adaptation of marketing mix 0.486 0.413 3.206*** 4.327***

H6: Export commitment–Adaptation of marketing mix 0.057 –0.006 0.404ns 0.048ns

H7: Export commitment–Perceived competitive advantages 0.678 –0.291 14.876*** 2.384ns

H8: Adaptation of marketing mix–Perceived competitive advantages 0.164 0.609 2.774*** 10.541***

H9: Perceived competitive advantages–Attitudes toward exporting in the future

0.727 0.276 21.766*** 1.169ns

Notes: ns = nonsignificant (one-tailed t(499) test). *** p < 0.001; ** p < 0.01; * p < 0.05.


reflects managers’ different perceptions, orientations, be-haviors, and attitudes toward export activity.

dIscUssIon And conTRIBUTIons

The discussion is organized around the two main objectives of the current research. The first main objective, the pro-posed theoretical model, which adopts a dynamic perspec-tive of firms’ export activity, offers a suitable framework to explain how the past, present, and future are interconnected from the perspective of the chain of perceptions, orienta-tions, behaviors, and attitudes of the managers involved in foreign marketing operations.

Focusing on the relations between variables and taking the global model as reference, a number of conclusions can be drawn. First, the quantitative dimension (export sales growth in past three years) of past export performance has no effect on managers’ orientations (level of export proactivity and export market orientation), which means rejecting Hypothesis 1a (β = 0.105; t-value = 1.613) and Hy-pothesis 2a (β = 0.042; t-value = 0.621). As Shoham (1999) and Sousa, Martínez-López, and Coelho (2008) point out, including quantitative indicators measuring sales, market share, profitability, and so forth implies adopting a short-term vision in the evaluation of success in internationaliza-tion processes, which may not be entirely appropriate if the aim is to evaluate the firm’s international orientation, strategic marketing management, and competitive position in the foreign markets from a dynamic perspective.

Second, the managers’ satisfaction with the export performance in the past three years has a positive effect on the firm’s levels of export proactivity and EMO. This confirms Hypothesis 1b (β = 0.552; t-value = 9.526) and Hypothesis 2b (β = 0.292; t-value = 3.274), and shows, as Lages, Jap, and Griffith (2008) point out, that in foreign markets, organizations learn from the results associated with the strategic decisions they have adopted. When these results are considered positive and the export managers are satisfied with what has been achieved, the firm’s export orientation will be reinforced and activities associated with the generation and dissemination of market intelligence will be boosted, along with the design of fast responses in line with the requirements of the foreign markets.

Third, export proactivity has a variance explained of 33.7 percent (R2 = 0.337), which is mainly determined by the importance attributed to foreign markets compared to the home market (weight = 0.505) and the efforts dedi-cated to investigating the foreign markets systematically (weight = 0.489). Export proactivity has a strong positive effect on the firm’s EMO activities, which supports Hypoth-esis 3 (β = 0.498; t-value = 6.405). The firm’s export proactiv-ity reduces psychological barriers making decisions relating to the internationalization process (Leonidou, Katsikeas, and Samiee 2002), causing managers to show a more active and dynamic behavior in the search for business opportunities in foreign markets and to develop more effective practices for capturing and processing information about the needs and preferences of foreign consumers (Zou and Cavusgil

Table 6t-Statistic for Multigroup Analysis

Standard Error

βG1

– βG2

t-ValueDegrees of FreedomGroup 1 Group 2

H1a: Quantitative past export performance–Export proactivity 0.046 0.168 0.343 1.963* 70H1b: Qualitative past export performance–Export proactivity 0.039 0.180 0.254 1.383 ns 69H2a: Quantitative past export performance–Export market

orientation0.034 0.123 –0.060 0.475 ns 70

H2b: Qualitative past export performance–Export market orientation

0.048 0.145 –0.106 0.694 ns 70

H3: Export proactivity–Export market orientation 0.045 0.219 0.615 2.740** 69H4: Export market orientation–Export commitment 0.018 0.088 0.517 7.493*** 69H5: Export market orientation–Adaptation of marketing mix 0.151 0.099 0.070 0.389 ns 76H6: Export commitment–Adaptation of marketing mix 0.143 0.107 1.113 0.468 ns 75H7: Export commitment–Perceived competitive advantages 0.045 0.113 0.706 7.852*** 70H8: Adaptation of marketing mix–Perceived competitive

advantages 0.059 0.067 –0.449 5.004*** 73

Notes: ns = nonsignificant (two-tailed t(148) test); *** p < 0.001; ** p < 0.01; * p < 0.05.

Spring 2011 199

2002). In this sense, the firm’s export proactivity is an es-sential input for the efficacy of its EMO activities.

Fourth, the variance explained of the EMO construct is 51.4 percent (R2 = 0.514). The dimensions that make the biggest contribution to forming this scale are generation of market intelligence (weight = 0.594) and speed of response (weight = 0.480). This shows that the managers of the ex-port firms are conscious of the enormous importance of obtaining relevant information about foreign markets and of reacting rapidly to changes in the environment. Both may prove essential in the design of effective and efficient marketing strategies, as well as to obtain competitive ad-vantages in the foreign markets (Rose and Shoham 2002). As postulated, EMO is an essential determinant—having a positive effect—of both export commitment and the strate-gic decisions associated with adapting the marketing-mix elements to the requirements of the foreign markets. These results support Hypothesis 4 (β = 0.599; t-value = 10.092) and Hypothesis 5 (β = 0.380; t-value = 4.132). The acquisi-tion and dissemination of relevant market information reduce the uncertainty and risks associated with the export activity (Racela, Chaikittisilpa, and Thoumrungroje 2007), make the firm show a greater commitment to dedicating the necessary resources to exporting, and make the firm more likely to adapt to the needs and desires of each country-market (Armario, Ruiz, and Armario 2008).

Fifth, export commitment, which has a variance ex-plained of 35.9 percent (R2 = 0.359), has a positive effect on the managers’ perceptions about the achievement of com-petitive advantages in the foreign markets, which supports Hypothesis 7 (β = 0.204; t-value = 2.365). It should be noted that the firms that are most committed to foreign markets organize and plan their export operations more carefully and tend to offer greater support to their foreign distribu-tors, exchanging information that is vital for the success of the operations (Cavusgil and Zou 1994). They also provide additional services, in particular, postsales services. All this may translate into higher levels of loyalty in the foreign markets and help the firm achieve competitive advantages in the different country-markets. The export managers will perceive these competitive advantages (Navarro et al. 2010b). Nevertheless, export commitment has no effect on the strategic decisions in foreign marketing, which depend exclusively on the firm’s EMO activities. Thus, Hypothesis 6 is rejected (β = 0.065; t-value = 0.706).

Sixth, strategic decisions about adapting the promotion (weight = 0.647) and price (weight = 0.417) are the dimen-sions that most contribute to forming the scale level of adaptation of the marketing-mix elements to the needs of

the foreign markets, which has a variance explained of 17.8 percent (R2 = 0.178). This variable has a strong positive effect on the managers’ perceived competitive advantages in the foreign markets, which supports Hypothesis 8 (β = 0.477; t-value = 6.635). The reason for this is that adapting the marketing-mix elements to the idiosyncrasies of the dif-ferent country-markets reduces the so-called psychologi-cal distance, which makes it more likely that consumers will perceive the firm’s products or services as offering greater value than those of its competitors (Theodosiou and Leonidou 2003).

Finally, perceived competitive advantages in costs (weight = 0.426), promotion (weight = 0.410), and human resources (weight = 0.335) are the dimensions that most contribute to forming the scale perceived competitive advantages in the foreign markets, which has a variance explained of 32.7 percent (R2 = 0.327). The managers’ perceptions about the firm’s competitive position in its foreign markets affect their attitudes about exporting in the immediate future. Thus, when the managers perceive that their firm’s international trade operations have advan-tages, they will have an attitude in favor of continuing to dedicate more resources to exporting (Leonidou, Katsikeas, and Samiee 2002). This supports Hypothesis 9 (β = 0.425; t-value = 6.354).

In sum, the attitudes toward future exporting depend on perceived competitive advantages in the foreign markets, which in turn reflect export commitment and strategic marketing behaviors (adaptation versus standardization) in foreign markets. These behaviors are influenced by the EMO practices carried out in the firm, which also affect the financial, human, and managerial resources allocated to the export activity (i.e., the export commitment). On the other hand, the EMO activities (generation and dis-semination of market intelligence and design of responses in line with market requirements) are affected by the firm’s level of export proactivity. Finally, past export performance contributes to organizational learning, although from a global perspective, it only does so through its qualitative dimension, that is, associated with the managers’ satisfac-tion with export performance. This last conclusion is in line with Lages, Jap, and Griffith’s (2008) arguments.

Looking now at the second main objective of the current work—identifying and analyzing different latent classes in the sample—it is important to understand that the different behaviors of the two groups found is due to their two very different ways of doing business in overseas markets. Firms from the first group are highly proactive, and centered on the consumer. They stress export market orientation and


have a clear vocation to increase their commitment to the foreign markets. Firms from the second group follow a more traditional strategy. They seem to use the foreign markets indistinctly and consider the export operations residual, although their performance does not differ from that of the firms from the other group. More specifically, the Group 1 firms—which can be called proactive exporters—perceive greater competitive advantages in the foreign markets, which translates into a highly favorable attitude toward exporting in the near future. This is because of their higher level of export commitment and the fact that they adapt the marketing-mix elements to the needs of the foreign markets. These firms have a high level of international orientation (EMO and export proactivity), and they treat the firm’s past performance as an input of organizational learning. Group 2 firms are more conservative or less proactive from the perspective of their managers’ orientations and attitudes toward exporting, with significant differences in the influ-ence of export proactivity on the EMO construct. They can be called conservative exporters.

All the above reflects the importance of how the sample is treated when drawing conclusions and how sample het-erogeneity can sometimes significantly affect the results of the analysis. Thus, for example, in the sample as a whole, quantitative performance does not affect the firm’s level of international orientation (EMO and export proactivity), but the heterogeneity analysis shows that the variable is an input of organizational learning in firms that are proactive in their export activity.

LIMITATIons And FUTURE LInEs oF REsEARcH

This study offers important and novel contributions to the export marketing literature, but it has a number of limitations, which will represent the starting point for future lines of research. The first limitation concerns the type of study carried out, since it is based on information obtained at a specific moment in time. Future work could carry out a longitudinal study to analyze how variations in the organization’s strategic orientation affect the manag-ers’ perceptions and attitudes toward export activity. The second limitation regards the fact that the sample comes from a single country. In order to generalize the conclusions drawn here, firms from a wider geographic area should be included in the analysis. The third limitation concerns the measurement of the adaptation of the marketing-mix ele-ments, since the decisions about price, product, promotion, and distribution are considered globally, in one scale. It may

be more appropriate to analyze individually the degree of adaptation of each marketing component to the needs of the foreign markets (Lages and Montgomery 2004; Lages, Jap, and Griffith 2008). The final limitation concerns the potential effect on the variables examined here of other factors not considered in the current study. Thus, in future work, researchers could consider, for example, the charac-teristics of the product exported, the sector of activity, the quality of the relationships with the international distribu-tors, or the organization’s dynamic capabilities (Leonidou, Katsikeas, and Samiee 2002).

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AppEndIx Measurement scales

Export performance in past Three years

Quantitative dimension: State growth in your firm’s export sales in each of the past three years (2000, 2001, and 2002): (1) negative, (2) zero, (3) 1–5%, (4) 6–10%, (5) 11–15%, (6) 16–20%, (7) > 20%.

Qualitative dimension: State managers’ satisfaction with results of your firm’s export activity in the past three years: 1 to 7 scale (1 = “totally unsatisfied”; 7 = “totally unsatisfied”).

EP1 Growth in export salesEP2 Awareness and image of firm in foreign marketsEP3 Profitability of export activityEP4 Market shareEP5 Firm’s international expansion

Export proactivity

Using a seven-point scale (1 = “totally disagree”; 7 = “totally agree”)

PRO1 Firm’s export propensity (export sales/total sales).PRO2 Importance of foreign markets compared to home market (1 = “much less”; 7 = “much more”).PRO3 Efforts expended by firm to investigate foreign markets systematically (1 = “none”; 7 = “considerable”).PRO4 Frequency of visits/contacts with foreign distributors in foreign markets (1 = “none”; 7 = “very high”).


The following block of questions evaluates your firm’s level of export market orientation using a seven-point scale (1 = “to-tally disagree”; 7 = “totally agree”).

Generation of Market Intelligence

GEN1 My firm systematically collects information about its foreign markets (needs, desires, satisfaction with its products, etc.).

GEN2 My firm systematically collects information about the actions of its rivals in the foreign markets (price policy, product, market segments targeted, etc.).

GEN3 My firm systematically collects information about the changes occurring in its export environment (technology, regulations, economic aspects, etc.).

Dissemination of Market Intelligence

DIS1 In my firm, there is fluent communication between the different departments/staff about the changes occurring in its export markets (competition and environment).

DIS2 In my firm, meetings are held periodically to discuss the trends and developments of its export markets.DIS3 In my firm, there is strong cooperation between the staff responsible for exports and the other departments

(research and development, finance, accounts, etc.).

Response to Market

RESP1 My firm tends to respond rapidly to changes detected in relation to its foreign customers.RESP2 My firm tends to respond rapidly to changes detected in relation to its foreign rivals.RESP3 My firm tends to respond rapidly to changes detected in its export environment.


Export commitment

Answer the following questions using a seven-point scale (1 = “very low”; 7 = “very high”)

COMM1 The level of time and effort the managers dedicate to the firm’s export activity is . . .COMM2 The level of financial resources currently dedicated to the firm’s export activity is . . .COMM3 The level of human resources currently dedicated to the firm’s export activity is . . .COMM4 Compared to the Spanish market, the resources dedicated to the firm’s export activity are . . .

Adaptation of Marketing-Mix Elements

Answer the following questions using a seven-point scale (1 = “none”; 7 = “considerable”)

Adaptations made in . . .

PROD ProductPRIC PriceDIST DistributionPROM Promotion

perceived competitive Advantages

Indicate your firm’s competitive position in its foreign markets in relation to its main rivals using a seven-point scale (1 = “much worse”; 7 = “much better”)

ADV1 Product differentiationADV2 PriceADV3 DistributionADV4 PromotionADV5 Human resourcesADV6 Costs

Attitudes Toward Future Exporting

Referring to the next two years, respond using a seven-point scale (1 = “very low”; 7 = “very high”)

ACTFUT1 Level of time and effort managers will dedicate to the firm’s export activity.ACTFUT2 Level of financial resources managers will dedicate to the firm’s export activity.ACTFUT3 Level of human resources managers will dedicate to the firm’s export activity.

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Integrate d Model of Export Activity

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